Veronie v. Garcia

878 F.2d 347, 1989 WL 71753
CourtCourt of Appeals for the Tenth Circuit
DecidedJuly 3, 1989
DocketNo. 88-1426
StatusPublished
Cited by2 cases

This text of 878 F.2d 347 (Veronie v. Garcia) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Veronie v. Garcia, 878 F.2d 347, 1989 WL 71753 (10th Cir. 1989).

Opinion

EBEL, Circuit Judge.

The issue presented in this case is whether a Louisiana workers’ compensation reimbursement statute, La.Rev.Stat.Ann. 23:1102(C) (1983), violates the due process clause or the equal protection clause of the Fourteenth Amendment of the United States Constitution. We find that the statute violates neither clause. We reverse and remand.

FACTS

The facts in this case are undisputed. On September 1, 1983, plaintiff Roy Joseph Veronie (“Veronie”), a teamster, sustained a severe work-related injury when he fell while climbing into the cab of a truck when the grab handle broke off. Veronie submitted a workers’ compensation claim to his employer’s workers’ compensation carrier, First Southern Insurance Company (“First Southern”), pursuant to which First Southern paid $134,964.33 in compensation and medical benefits.

On January 9, 1985, Veronie filed suit in the United States District Court for the District of New Mexico against appellee Tony Garcia d/b/a Tony’s Paint and Body Shop, Inc. (“Garcia”), who had repaired the grab handle that broke loose. The complaint alleged that Garcia was liable for Veronie’s injuries on the grounds that Garcia negligently repaired the grab handle, which negligence proximately caused injuries to Veronie.

Pursuant to La.Rev.Stat.Ann. 23:1102(A) (1983),1 First Southern intervened in the litigation alleging that, under the Louisiana Workers’ Compensation Law,2 it was entitled to recover any compensation and medical benefits that it had already paid to Veronie.

Garcia subsequently settled Veronie’s claim against him for $12,000 without First Southern’s approval. Veronie and Garcia submitted to the district court a joint motion to dismiss Veronie’s claim with prejudice based on their settlement, and the [349]*349district court granted that motion on February 3, 1987.

On March 25, 1987, First Southern filed a motion for summary judgment against Garcia for reimbursement of all benefits that First Southern had previously paid to Vero-nie, pursuant to La.Rev.Stat.Ann. 23:1102(C) (1983), which provides:

If the third parly defendant or his insurer fails to obtain written approval of the compromise from the employer or his insurer at the time of or prior to such compromise, and the employee fails to pay to the employer the total amount of compensation benefits, medical benefits, attorney’s fees, and penalties out of the funds received as a result of the compromise, the third party defendant or his insurer shall be required to reimburse the employer or his insurer to the extent of the total amount of compensation benefits, medical benefits, attorney’s fees, or penalties previously paid to or on behalf of the employee to the extent said amounts have not been previously paid to the employer by the employee pursuant to the provisions of Subsection B of this Section.

First Southern argued in support of its motion for summary judgment that it was entitled to judgment against Garcia “because of his failure to obtain written approval of the settlement from First Southern and the failure of Veronie to pay to First Southern the total amount of compensation benefits he received from the settlement.” Memorandum in Support of Plaintiff in Intervention’s Motion for Summary Judgment, p. 2.

Garcia argued in response that La.Rev. Stat.Ann. 23:1102(C) (1983) is unconstitutional because it deprives him of property without any hearing or determination of liability. Memorandum in Response to In-tervenor’s Motion for Summary Judgment, p. 11-13. The district court agreed with Garcia, and, on November 25, 1987, denied First Southern’s motion for summary judgment on the grounds that La.Rev.Stat.Ann. 23:1102(C) (1983) “is unconstitutional in that it violates the constitutionally guaranteed due process procedures of the employees and third parties therein.” Order Denying Intervenor’s Motion for Summary Judgment, p. 2. In its order, the district court also stated that “an immediate appeal from the Order may materially advance the ultimate termination the litigation.” Id. First Southern subsequently petitioned this court for permission to appeal pursuant to 28 U.S.C. § 1292(b), which permission was granted.

PROCEDURAL DUE PROCESS

The first issue on appeal is whether La. Rev.Stat.Ann. 23:1102(C) (1983) violates the procedural due process guarantees of the Fourteenth Amendment.3 Garcia argues that section 23:1102(C) violates the procedural due process because it allows First Southern to obtain a money judgment in the amount of $134,964.33 against him without a full trial on the merits as to Garcia’s liability to Veronie.4

Garcia fails, however, to distinguish between the original tort claim brought against him by Veronie, which he settled for $12,000, and the statutory liability to First Southern that he incurred when he settled with Veronie without First Southern’s approval. Garcia had the option of litigating his liability to Veronie for the underlying tort claim, but chose instead to settle it by payment to Veronie of $12,000 without first obtaining the required approval from First Southern. Garcia’s culpability to Veronie is not relevant to the claim brought against him by First Southern because First Southern is not claiming derivatively through Veronie. Rather, First Southern’s claim is that Garcia breached a separate duty owed to it — a statutory duty not to settle a claim brought by an injured employee, such as Veronie, without first obtaining the consent of the workers’ com[350]*350pensation insurer that has made unreim-bursed payments to the employee.

The elements of this statutory cause of action created by section 23:1102(C) are: (1) a settlement between the injured employee and the third-party tortfeasor; (2) lack of written approval of the settlement from the employer or insurer; and (3) failure of the employee to pay back to his employer or insurer the total amount of compensation benefits previously received by him from his employer or insurer. The statute imposes a duty on the third party tortfeasor not to make any settlement payments to the injured party until either he has obtained written approval from the employer or insurer, or the employee has reimbursed the employer or insurer all the funds previously received. If that duty is breached, the statute imposes liability on the third party tortfeasor for the full amount previously paid by the employer or insurer to the employee less any sums the employee has reimbursed to the employer or insurer.

Pursuant to this statutory cause of action, before First Southern is entitled to a money judgment against Garcia, it must invoke the judicial process and prove the elements of the statutory cause of action.

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Related

Gyadu v. Workers' Compensation Commission
930 F. Supp. 738 (D. Connecticut, 1996)
Veronie v. Garcia
878 F.2d 347 (First Circuit, 1989)

Cite This Page — Counsel Stack

Bluebook (online)
878 F.2d 347, 1989 WL 71753, Counsel Stack Legal Research, https://law.counselstack.com/opinion/veronie-v-garcia-ca10-1989.